TaxTMI 
TaxTMI 
2000 (1) TMI 80
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....t under question which had been classified under heading 3912.90 of the Tariff. The Revenue is also partially aggrieved with the Order-in-Appeal No. 140/94(H)-C.E., dated 22-11-1994 in so far as the relief pertaining to valuation in respect of interest on receivables granted in the impugned order in Appeal No. E/480/95. 2.Therefore, the main issue before us is classification of ceIlulose powder namely relipulp powder. This product is also sold by the assessees under the trade name of Alfacel-T. While the Revenue has classified under heading 3912.90, the assessee prefers under Heading 47.01. 3.Heard learned DR Shri S. Kannan and learned Senior Advocate Shri M. Chandrasekharan along with Shri V.J. Sankaram, learned advocate. 4.The learned DR reiterates the ground of appeal of Revenue in Appeal No. E/987/99 and submits that the product would be classifiable under Heading 3912.90 because the manufacturing process continued beyond cooking the input namely cotton rags etc. by washing by diluted acid at a temperature of 70°C-80°C which is then washed and dried to make pulp. Therefore, this process was different from the process of manufacture of cotton linters and the Board's Circula....
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....nificant to the determination of this classification and reads as follows :- "Cellulose not elsewhere specified or included, in primary forms, falls in this heading." The learned senior advocate submits that the cellulose of such residuary nature only will fall under Chapter 39 i.e. if it is not falling under Chapter 47 then alone it can be claimed under Chapter 39. In his case, in view of the Chapter Notes of Chapter 47 being specified both with respect to the raw materials used and the physical form of powder in which pulp is sold, therefore, Chapter 39 would be automatically excluded in view of the exclusion clause in the said Notes. He further submits that the Heading 39.12 in the HSN is totally aligned with the Heading 39.12 of the Central Excise Tariff, therefore, these Notes would apply to the Tariff. He further submits that Circular No. 6/90 of the Board relied upon by the Revenue deals with those products which are obtained by mixing the raw material with Hydrochloric acid and boiling about one to two hours etc. i.e. cooking is done in acidic medium. As against that the tour note of Shri C.K.Viswanathan, Assistant Chemical Examiner of Customs, records of their own proces....
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....ion showed that their structure was of the nature of very short fibres. We, therefore, conclude that the product is cellulose fibres of very short length, physically appearing as in powder form. 7.We find great force in the submissions of the learned senior advocate that in view of the raw materials used and the powder form of cellulose short fibre being specified in the General Notes of Chapter 47 of the HSN noted above, the product would clearly fall under that Chapter. We are agreeable to his submissions that since the Note under Heading 39.12 on cellulose in the said HSN as recorded above clearly lays down that Chapter 39 would only be applicable in cases where such pulp does not fall under any other Chapter of the HSN. In this case, since in view of the use of cotton rags; in view of the manufacturing process being basically in alkaline medium; and in view of the end product being in powder form which are recognised by Notes under Chapter 47 of the HSN, the end product would fall under Chapter 47 and would therefore, be automatically excluded from the ambit of Chapter 39. Once the product is excluded from the ambit of Chapter 39; then the reliance on Chapter Note 6(b) pleaded....
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....hat test with respect to any powder was under the earlier classification system which had been superceded by the advent of Harmonized System of Nomenclature. In the HSN in Chapter 47, the Notes only recognised the existence of this product in powder form but no further particle size dimensions have been prescribed. Therefore, this decision of the learned Commissioner (Appeals) is erroneous with respect to the HSN Explanatory Notes on which the present Central Excise Tariff is based. He further, submits that the Commissioner (Appeals) has also erroneously upheld the decision that the final product was supplied to the manufacturers of pharmaceutical products. As against that the appellants have now placed before us additional evidences to the effect that the end product is only sold for manufacture of electrode as well as that of carbonless paper. We have perused these additional evidences and since they are related to the issue under discussion, we accept the same on record. 9.Learned DR reiterates his submissions earlier made in the Revenue's appeal in this case also. He also submits that in the Sieve Test applied by the Chemical Examiner and recorded in the Order-in-Appeal impugn....